Infosys Technologies (INFY) Failed At Major Technical Support

INFY dropped 13.42 on Friday after disappointing fourth quarter results and uninspiring forecast.  

Two Charts to focus on:

First the daily chart where we notice a 5 month long head & shoulders pattern that is just now starting play out asthe neckline got broken on Friday….at $65.  In a perfect world the ultimate profit target for this pattern would be  just around $51.  What else?  Note the uptrend (straight red line) in place since September 2010 that broke on Friday…as well as the 200 day moving average (red line).  That's all nice and well, but I like to look at longer-term charts for further clues of the significance of this setup for a short.

Enter the monthly chart.  The major concern here for a potential short trade is support at around $61, which was previous resistance on a monthly basis back in February 2007 and up until September in 2010.

The strategy I am considering here is what I call the  'large mover play' which I have outlined here previously:

Happy Trading



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